Have you ever heard of FTSE spread betting? Well if you have any exposure to the index you should at least know something about it. The are many advantages and some disadvantages. I want to tell you about these and how you can decide if it is for you.
Well I hope you have heard of the FTSE. It is reported in the media every day. It is the main market in the UK. It is compiled from the largest shares in the UK stock market. When you are taking advantage of FTSE spread betting you are exposing yourself to a large number of shares and not just the movement of the individual companies.
FTSE spread betting is probably not suitable for you if you would prefer to trade individual shares. You could take advantage of some of its benefits through financial spread betting. Perhaps you should look at doing both? Get exposure to the entire market and trade separate stocks. It’s potentially a good way to diversify.
Is it possible to just have a tracker rather than worrying about FTSE spread betting? Well this is definitely an option and for most people this will be the best option. The tracker will give you access to the whole of the index to without having to do much work.
So why would you want to do FTSE spread betting if a tracker fund would be more suited to most people. There are lots of other advantages when it comes to FTSE spread betting. The first benefit is that you do not have to pay tax in the UK. If you hold them in a ISA then this is potentially true on the profits.
The other advantages include being able to trade in many different markets from the same account, not having to pay commissions and being able to trade on a margin. By trading on a margin you are using leverage so this may be risky.
Please speak to your financial advisor if you are unsure of the rules relating to tax and to see if FTSE spread betting is a suitable route for you to take with your investing.
